What is Hotel ADR? | 3 Simple Ways to Maximize

Hotel ADR has become one of the most important pricing models in the hospitality industry. If you’re new to the hotel business or if you’re looking for ways to increase your ADR, we have a few tips on how you can boost your rates by focusing on improving your guest experience.

We’re not in the hotel management business, but we’ve been fortunate enough to work with countless boutique and independent properties and we’ve seen how small changes can make a big impact.

ADR: A Quick Definition for New Hotel Owners

Have you just opened up a bed and breakfast, vacation rental, or small hotel? You may or may not be familiar with ADR.

In hotels, ADR refers to the average daily rate.

ADR is used to calculate the average daily revenue generated by your booked rooms.

Formula:

Total Room Revenue / Number of Rooms Sold = ADR

For example, let’s say that on a Friday, you booked 83 rooms at your property, which generated a total revenue of $24,000.

24,000 / 83 = 289.15 ADR

So, each of your occupied rooms would be earning an average of $289.15 on that night.

No room is priced at $289 — some of the rooms are priced higher, while others are priced lower. The ADR is just the average.

Why is ADR Important?

Without ADR, it would be difficult to figure out the best prices to set at your hotel. Rates change depending on the season, number of vacancies, competitor pricing, and economic factors.

ADR makes it easy to compare your rates from week to week, month to month, season to season, or year to year.

For example, let’s say that you had a sold-out property on the Fourth of July with an ADR of $300. You had no problem filling up your hotel, so next year you could try raising the prices to increase your ADR and, thus, your revenue.

Or, maybe your hotel didn’t perform very well on the Fourth of July — you set high rates, but had many vacancies, and your ADR was $180. Next year, you might consider lowering your rates so you can fill up more rooms. This strategy could help you improve your ADR and, thus, your revenue.

3 Simple Ways to Increase Your ADR

From our experience working with successful boutique hotels, we’ve learned that you don’t need to be the largest, glitziest property to set higher room rates. You can gradually increase your ADR by creating a memorable guest experience at your hotel. There are a few cost-effective ways you can do that when you leverage the right custom supplies at your property.

1. Create Luxury for Less

You don’t need to have a big, glamorous property to create a luxury experience for your guests. One of the easiest ways to do that is to upscale your hotel supplies.

Of all your hotel supplies, the key cards and key holders are handled most by guests so it’s useful to give them a more polished feel and look. Consider adding a matte finish to your key cards and key holders. For your key holders, you might also consider using a key folder or multi-panel key folder, which will make an incredible first impression on your guests. Colorful pictures can really emphasize the luxury of the property, while showcasing onsite amenities and facilities. These facilities often include extra items that start to boost your ADR. Simply offering incentives to these facilities helps drive ADR increases.

You might also consider using luxury do not disturb signs (which are made from wood or fabric) and also metallic pens (which have a nicer aesthetic than plastic pens).

These small details can go a long way in improving the elegance of your property.

2. Build Loyalty Programs

Nowadays, most hotels have some type of loyalty program, but smaller boutique and independent hotels may not have incorporated them yet.

Smaller hotels may have difficulty growing their room rates simply because they don’t have enough visibility or a high enough occupancy rate.

Loyalty programs are beneficial because they provide incentives for your customers to keep coming back. Once you’ve built trust and loyalty with your customers, they’re more likely to spread the word about your property, via online reviews or word of mouth. You could also book more rooms at your property, making it easier to raise your rates.

There’s another benefit, too: loyalty programs encourage customers to book directly with the hotel, so you don’t have to pay commission to OTAs.

3. Give Your Staff the Right Tools

A superb hotel staff is crucial for maintaining high customer service and room rates. The right hotel supplies can make your staff so much more efficient.

For example, if your hotel uses LoCo magnetic key cards, then your staff might be spending too much time replacing key cards that have gotten demagnetized; LoCo key cards are known to get demagnetized easily.

You can take some of the workload off your staff by replacing LoCo key cards with HiCo key cards, which aren’t as troublesome. Or, you can switch to RFID key cards, which can be programmed very quickly and are easier for guests to use.

Likewise, your front desk staff might be overburdened with questions about your property. (i.e. What time does the restaurant open? Are there any good restaurants nearby?).

It’s helpful to provide your most important property information on the key holder with either a scannable QR code or a key folder.

These simple product changes can free up your hotel staff so they can focus on providing excellent customer service and handling more pressing tasks, such as check-ins and guest emergencies.

Want to Improve Your Hotel ADR? Contact Front Desk Supply

Ready to boost your guest experience and your revenue? Start by upgrading your hotel supplies with Front Desk Supply. We can brand any hotel product with your logo, and add a variety of finishes for a luxurious look and feel. Plus, we offer a free graphic design service to help you with the customization.

What is Hotel ADR: 3 Simple Ways to Maximize